Economic Development

Convert City Lights to LEDs? Not so Fast.

WARREN, Ohio – The solution to reduce the costs of lighting the city streets of Warren seems simple enough: swap the aging, yellow-hued, high-pressure sodium streetlights with more efficient light-emitting diode, or LED, fixtures.

But Ken MacPherson and Greg Greathouse have discovered it’s anything but simple. Instead, they’ve found what it’s like to take on a big utility, a government bureaucracy and a complex regulatory environment.

“Nothing is done fast when you’re dealing with bureaucracy,” says MacPherson, the city’s Fifth Ward councilman. “It’s a labyrinth.”

For months, MacPherson and Greathouse have been vocal about galvanizing support for restructuring the antiquated lighting infrastructure of their city. A conversion to LED, they say, could save Warren hundreds of thousands of dollars each year because LEDs use substantially less energy and have a lifespan at least double that of traditional fixtures. 

There’s just one catch. The city of Warren doesn’t own most of its streetlights. They belong to Ohio Edison, the regional subsidiary of electric giant FirstEnergy. 

“They’ve got you over a barrel,” Greathouse says. 

FirstEnergy distributes power to the city of Warren and charges its rate based on use per kilowatt hour, or kWh. Greathouse suspects there is not much enthusiasm within the company to convert municipal streetlights to cost-saving LEDs because, in the long-term, it would be a large blow to FirstEnergy revenues. 

“Street lighting is a valuable commodity to the corporation,” he asserts. “It’s a decrease in revenue for them.” The less power used, the less power sold. 

MacPherson, chairman of the public utilities committee of Warren City Council, and Greathouse met recently with FirstEnergy representatives to discuss options for the city. During that meeting, company officials apprised the pair of FirstEnergy’s experimental plan to roll out LED lighting for municipalities.

Under this plan, the municipality would pay a $228 upfront cost for each fixture, plus $76 per month that would satisfy the total change-out costs – estimated at $2,736 per pole – in three years. Also during that period, the price per kWh would rise from the 3.5 cents that Warren pays now to 6 cents per kWh on top of the added charges. 

However, MacPherson says, these are merely replacement costs and there are no guarantees that the rates would not rise. And there are no provisions for Warren acquiring the poles and light fixtures from the company either, he says. 

Were the city to own the fixtures, the long-term benefits could mean reducing the city street-lighting bill by one-half to two-thirds every year, Greathouse estimates.

Greathouse, who is running in the May Democratic primary to represent the third ward on city council and formerly worked for Ohio Edison, says it makes no sense to pay more for using less electricity. “We have thousands of street lights and no way to acquire those fixtures,” he says. “Street lighting is a cash cow.”

In March, the city paid Ohio Edison $39,799.60 on 2,194 streetlights, an average of $18.13 per light. The $228 upfront conversion cost alone would add up to $500,232. 

Aside from these costs, the city would be responsible for hiring an outside party to conduct an energy audit, which would cost “thousands of dollars,” according to MacPherson.

“It’s rather disheartening,” he says. “There’s no incentive to modernize.”

The answer could be to replace these lights incrementally and use the savings to pay for future replacements, MacPherson says. 

A new pilot program FirstEnergy initiated this year might be an option. Under this initiative, the city could install new LED lights in groups of 12, and it’s possible to at least start the process here, MacPherson says. 

 “We’d like to consider the pilot project; start with 12 of them and see how the public reacts,” the councilman says. “We have to make sure citizens are OK with this, but I think it’s a feasible project.” 

Enzo Cantalamessa, the city safety director, says when Warren first investigated the option of installing LEDs, the upfront costs were too much for Warren, or any other municipality for that matter, to bear. 

“One of the drawbacks was the significant amount of outlay it would have taken to purchase the lights,” he says.

A more practical solution would be to strike an agreement with FirstEnergy that would roll all of those costs into a long-term payoff plan that would result in Warren owning those lights, Cantalamessa says. “If we could use the savings as payment, or toward part of the payment, over a 10- or 15-year period, that might work.”

The current tariff structure approved by the Public Utilities Commission of Ohio makes it difficult for cities to make this transition without being hit hard with upfront costs, Cantalamessa says. 

“I understand there’s some discussion at the state level [to address this],” he says.

FirstEnergy is a powerful force in state politics. According to the Ohio Lobbying Activity Center, FirstEnergy reports that as of Jan. 11, 2019, it had 12 registered lobbyists active in advocacy roles before the Ohio General Assembly or the PUCO. Between April and December 2018, First Energy’s political action committee spent $198,156.16 on statewide political campaigns, according to the Ohio Secretary of State office. 

Moreover, the Ohio Edison/FirstEnergy ownership of municipal lighting goes back decades. The utility owns most of the public streetlights in Akron, Youngstown, Girard, Salem and Lisbon, for example. 

“We’re happy to work with municipalities to provide any street-lighting solutions they like,” says Christopher Eck, spokesman for FirstEnergy. “We’re seeing more demand for LEDs across our service territory.”

Initially, Eck says FirstEnergy was hesitant to roll out new LED programs because the initial costs were so prohibitive and supply was limited. “There really wasn’t reluctance on our part to do this, but early on, there was several- months lead time before we could even get fixtures,” he says.

However, LED costs have come down, making it feasible for municipalities to make the change, he says. 

Yet, this comes at a risk for the utilities, Eck says. Should an LED fixture or light break, the entire fixture requires replacement, not just the bulb. “The utility takes on that risk as well,” he says. 

In general, FirstEnergy’s communities aren’t converting to LED lighting to save money, Eck says, since transmission and distribution costs are already fixed. Instead, they are acting “to improve the quality of their lighting, which increases visibility for motorists and pedestrians, and increases safety in neighborhoods as well,” he says. 

Meanwhile those communities across the Mahoning Valley that aren’t tied to FirstEnergy have made significant progress in making the transition from high-pressure sodium bulbs to LEDs, and it’s had an effect on costs.

“We’ve been switching our lights over the last several years,” says Jim Newbrough, superintendent of Niles’ light department. “The main thoroughfares are done – Robbins Avenue, U.S. 422, North Road.”

The city receives its power generation from American Municipal Power, or AMP, a pool of 128 communities, most of them in Ohio. Until the mid-1970s, the city owned and operated its own power plant. 

Newbrough says the city owns all of the 4,000 streetlights in Niles, of which about 500 are now converted to LED. “It’s cut energy usage and costs on those lights by half,” he says.

Niles held off replacing the lights until about three years ago, because the cost of swapping out the lights was prohibitive. Today, the cost of an LED bulb is about the same as a high-pressure sodium fixture. “Next, we’ll be hitting some of the residential areas,” he says. “We have plans for 500 new lights in different neighborhoods.”

And, the LED fixtures are guaranteed for five years, Newbrough says. “A lot of them last for 10. The incandescent bulbs never lasted more than two years at best,” he says.

Larger cities have also witnessed tremendous returns since making the transition to LED lighting. 

Less than three years ago, Detroit completed a $185 million streetlight overhaul that replaced 65,000 fixtures with LED. Making the investment more impressive is the fact that Detroit was bankrupt in 2013. 

To accomplish this, the city spun off its lighting department from municipal government and formed the debt-free Public Lighting Authority. 

The lighting authority was then able to float bonds to fund the lighting project, and pays the bonds off with a portion of the utility use tax – $12.5 million per year – that Detroit pays the authority. 

According to a study completed by the U.S. Department of Energy Pacific Northwest National Laboratory, Detroit saves about $2.9 million per year – cutting its streetlight bill nearly in half – as a result of the conversion. 

This was one of the major topics of discussion between Youngstown Mayor Jamael Tito Brown and Detroit Mayor Mike Duggan during a recent visit Brown made to the Motor City.

“They took the corridor approach first,” Brown says. 

The Detroit LED program was coupled with an aggressive cleanup effort that targeted illegal dumpsites along the major thoroughfares of that city. 

“If Detroit can do it, why not Youngstown,” Brown said March 28 during his first state of the city address.

Brown says some portions of the city have already been converted. A $4.5 million infrastructure revitalization project along Wick Avenue two years ago replaced high-pressure sodium lights with LEDs. 

The city now owns those lights, as well as those along Hazel Street leading to the Williamson College of Business Administration at Youngstown State University. 

A similar plan is expected for Fifth Avenue, Brown says. The city was successful in securing a $10 million grant from the U.S. Department of Transportation to upgrade the area around Fifth Avenue near YSU. 

But Youngstown is bound by the same limitations as the city of Warren in that the city does not own the majority of its streetlights. 

“There are about 600 streetlights that are city-owned,” the mayor says. The key would be to acquire the rest of these lights to move forward with any long-term comprehensive lighting program. 

Brown says Youngstown is working closely with FirstEnergy on options, but officials have not yet determined whether the costs outweigh the benefits, he says. 

City finance director Kyle Miasek says the city paid FirstEnergy $1.034 million for street lighting in 2018. “It’s hovered around this price over the last five years,” he says.

Among the issues smaller communities face is there isn’t enough funding to help offset the costs of converting their lighting systems, says Girard Mayor Jim Melfi.

About a year and a half ago,  Girard replaced some of its high-pressure sodium bulbs with LED fixtures along South State Street from the Interstate 80 interchange to the Youngstown city limits. The project cost about $15,000 with some help from FirstEnergy, Melfi notes.

“We’re not seeing an overwhelming amount of savings,” the mayor says. “But it’s much brighter and safer.”

Still, city officials remain frustrated as they examine ways to introduce to their communities progressive, more efficient ways to manage and administer municipal affairs.

“This is more than just changing light bulbs,” says Warren’s MacPherson, the Fifth Ward councilman. “It should be easier than this – not so complex and not so convoluted.”

MacPherson notes that conversion to LEDs is just one aspect of a broader effort to modernize American cities that are desperately in need of technological upgrades. But he argues these efforts are held back because of outdated monopolies and sluggish government agencies. 

“Sodium lights were great during the 1950s. That was cutting-edge technology back then,” he says. “We want to move forward in a progressive way and in a rational sense. If anything, this shows us how unresponsive government bureaucracies are to innovation.”

Pictured: Converting to LED bulbs could save Warren a fortune, say Ken MacPherson and Greg Greathouse.

Published by The Business Journal, Youngstown, Ohio.